ANSHU SAHAI (HUF),JAIPUR vs. ACIT, CENTRAL CIRCLE, CENTRAL CIRCLE

The appeals preferred by the appellant/Revenue are hereby rejected.
Consequently, the order passed by the learned
Single
Judge in W.P.Nos.9937/2022 C/w. W.P.Nos.9938/2022, 9939/2022, 9945/2022 and 9946/2022 is hereby confirmed.
Before parting with this judgment, this Court places on record its deep appreciation for the able research and assistance rendered by its Research
Assistant-cum-Law Clerk, Mr.Pranav.K.B.
12.1 Vide ground no. 2 the assessee – appellant challenges the finding of the ld. CIT(A) in upholding the assessment order which was passed without obtaining proper approval under section 153D of the Act and thereby prayed to quash the entire assessment order as absence of proper approval under section 153D has vitiated the assessment order.

Record reveals that all the seven Assessment Years i.e. A.Y. 2015-
16, A.Y. 2016-17, A.Y. 2017-18, A.Y. 2018-19, A.Y. 2019-20, A.Y. 2020-21,
A.Y. 2021-22 were approved in just one day. The draft assessment orders by ld. AO were sent, for approval, on 22.03.2024 and all the seven assessment orders were approved on 23.03.2024 [paper book page 188-
195]. The prime object of entrusting the duty of approval of assessment in search cases is that the Additional CIT, with his experience and maturity of understanding, should scrutinize the seized documents and other material forming the foundation of assessment. Whenever any statutory obligation is casted upon any statutory authority such authority is required to discharge
Anshu Sahai (HUF) vs. ACIT its obligation not mechanically, but after due application of mind. Thus, the obligation of granting approval acts as an inbuilt protection to the taxpayer against arbitrary or unjust exercise of discretion. As is evident from the record that for the year under consideration, the approval granted was granted for all the year absolutely mechanical without even analysing the basic evidences and was given in just one having much of the facts and seized records to be examined and completing the process just in one day for all these years is humanely not possible in a day. This approval was granted along with discharging other regular official functions and maybe also other such approvals by the same approving authority. Ld. AR of the assessee serviced the decision of the co-ordinate bench of ITAT in the case of Shreelekha Damani V. DCIT (2015) 173 TTJ (Mumbai) 332, wherein the co-ordinate bench held that:
“Coming to the facts of the case in hand in the light of the analytical discussion hereinabove and as mentioned elsewhere, the Addl. Commissioner has showed his inability to analyze the issues of draft order on merit clearly stating that no much time is left, inasmuch as the draft order was placed before him on 31.12.2010 and the approval was granted on the very same day. Considering the factual matrix of the approval letter, we have no hesitation to hold that the approval granted by the Addl. Commissioner is devoid of any application of mind, is mechanical and without considering the materials on record. In our considered opinion, the power vested in the Joint Commissioner/Addl Commissioner to grant or not to grant approval is coupled with a duty. The Addl Commissioner/Joint
Commissioner is required to apply his mind to the proposals put up to him for approval in the light of the material relied upon by the AO. The said power cannot be exercised casually and in a routine manner. We are constrained to observe that in the present case, there has been no application of mind by the Addl.
Commissioner before granting the approval. Therefore, we have no hesitation to hold that the assessment order made u/s. 143(3) of the Act r.w. sec. 153A of the Anshu Sahai (HUF) vs. ACIT

Act is bad in law and deserves to be annulled. The additional ground of appeal is allowed.”

Reliance was also placed on the Judgment of Hon’ble Supreme Court in the case of CIT v. S. Goyanka Lime & Chemical Ltd. [2015]
64.taxmann.com 313 (SC) wherein the department’s SLP was dismissed.
Similar view was serviced as legal precedent of the Hon’ble Supreme Court in ACIT vs. Serajuddin & Co. [2024] 163 taxmann.com 118 (SC) wherein the Apex Court held that approval u/s 153D is a mandatory safeguard and cannot be granted mechanically. Further, in PCIT vs. Anuj Bansal [2024]
165 taxmann.com 3 (SC), Hon’ble Supreme Court upheld the finding that absence of application of mind by the approving authority renders the approval invalid. It has also been held by the Hon’ble Allahabad High Court in PCIT vs. Sapna Gupta [2023] 147 taxmann.com 288 (All HC), that approval must be granted separately for each assessment year. Hon’ble
Delhi High Court in PCIT vs. MDLR Hotels (P) Ltd [2024] 166
taxmann.com 327 (Del HC) and in PCIT vs. Shiv Kumar Nayyar [2024]
163 taxmann.com 9 (Del HC) quashed approvals granted in bulk for multiple assessments without application of mind. These judgments reinforce the principle that approval under Section 153D is not a mere administrative ritual but a substantive safeguard, which must be exercised
Anshu Sahai (HUF) vs. ACIT judiciously for each assessment year independently. That view was also consistently followed by the various benches of the ITAT for which reference was made to the decision of ITAT Delhi Benches in Harish Bajaj vs. DCIT, ITA No. 2218 to 2223/Del/2023 and Wave Industries Pvt. Ltd.
vs. DCIT ITA 5241/Del/2015, ITAT Pune in Santosh Subhashappa Mukta vs. DCIT, ITA 18,19 & 20/PUN/2021, where assessments framed on the basis of mechanical approvals u/s 153D were held to be invalid and quashed.
Since the facts of the case on hand and the facts of the case laws as cited herein above on being consistent with the legal precedent of the case laws of the Hon’ble Supreme Court, the Hon’ble High Courts, and consistently applied by the coordinate benches of the Tribunal, we hold that the approval granted u/s 153D in the present case was accorded in a mechanical without due application of mind. Such approval being invalid, the consequential assessment orders framed u/s 153C read with Section 153D for Assessment Years 2016-17 to 2018-19 cannot be sustained in law and are therefore quashed. In the result Ground no. 2 raised by the assessee is allowed.
12.3 Vide ground no. 3 the assessee – appellant challenges that ld. CIT(A) has erred in upholding the addition amounting to Rs. 16,21,91,214/- (albeit
Anshu Sahai (HUF) vs. ACIT as part of capital gains) based on the set of facts and circumstances available on record and thereby the same is required to be deleted. The brief facts as emerges from the record are that a search and seizure action u/s 132 of the Income Tax Act, 1961, was carried out by the Income Tax
Department on the Gokul Kripa Group on 19.01.2021. During the course of search, it is alleged, that certain incriminating digital data was found at one of the premises of Gokul Kripa Group. The said digital data, as per allegations, by the ld. AO, contained details of cash payments which allegedly were made, over and above the cheque payments, towards consideration for purchase of the above lands from the Assessee Appellant along with other family members. The details of such alleged cash payments are appearing at pages 4 to 14 of the order of the ld. AO. It is alleged that the total cash payments, emerging from above digital data, in all, amounted to Rs. 56,31,38,250/- made to all the family members towards all the sale transactions spanning over the following 3 financial years (ld. AO Pages 34). Ld. AO apportioned the alleged on-money paid in cash in proportion to cheque amount received by individual seller and, thereafter, said amount was further bifurcated into three financial years.
The said workings are appearing at page 35 of the assessment order. On the basis of above presumptions and apportionment, following additions
Anshu Sahai (HUF) vs. ACIT have been made towards alleged consideration received for sale of land over and above the consideration received through banking channel:
Assessment Year
Amount (in Rs.)
2016-17
16,21,91,214/-
2017-18
17,81,66,880/-
2018-19
3,40,24,557/-

Record reveals that the alleged on-money payments in cash are spread over a period starting from 15.09.2015 and ending on 18.03.2018. This period extends to 30 months. It is submitted that registered sale deeds were executed on 05.11.2015, 01.01.2016 and 04.08.2016. The last deed thus was executed on 04.08.2016 whereas last of the alleged payments was received as late as on 18.03.2018. The gap is about 19 months. In sale of property transaction, it is hard to believe that the seller of property make the document without receipt of the alleged-on money. The revenue could not demonstrate or provide any corroborative evidence to the contention the assessee was given the on-money even after the sale deed was executed. Except that loose sheet no corroborative evidence was placed on record by the revenue to support the contention. Having noted so revenue has not taken any action against the assessee as per provision of section 269ST this itself shows that the case of revenue without any further evidence that the payment as alleged to have been made to the assessee
Anshu Sahai (HUF) vs. ACIT are related to that impugned property sold by the assessee to the person searched and the payment by that assessee made to the assessee in appeal and that too after the 19 month of the last transaction and in a piece meal. Not only that it is also hard to believe that 4 parties making separate payment on the same day to the assessee on various occasion and observed by the bench on this issue that the same instances are reported at page 4 onward and serially number at 5, 8 19 & 29. This instances itself suggest that preponderance of probability goes in favour of the assessee and the plea of the revenue has no supporting or corroborative found. Be that it may so it is a matter of common sense that the seller would have no right, least the legal right to recover the on-money. This glaring anomaly in the approach of the revenue is without any support of the any alleged agreement or any record of having agreed to such terms and condition as alleged by the revenue. The recipient of the on-money were not confronted to this issue at the time of search or post search proceeding. Before deriving such conclusion neither at the time of search nor in the post search proceeding revenue confronted to the assessee on such allegation.
The bench also considered the factual argument of the ld. AR of the assessee that the name of the assessee is appearing only at 3 places i.e.
serial number 149, 164 and 166 (assessment order page 12 & 13). Thus, months would execute that task without maintaining underlying data and also without obtaining signatures of the recipients. This again proves that action of ld. AO is without any basis and beyond human probabilities. It is also out of human probabilities that many payments are in the multiples of hundreds which normally do not look plausible when such huge payment was to be made in cash. Similarly, on various dates, payments are made by more than one directors or even by all the directors which again do not look plausible and this it self raise doubt on the pattern of recording of such entries in the loose excel sheet. That sheet does not contain any reference to voucher or receipt so as to believe the contention of the revenue. Not Anshu Sahai (HUF) vs. ACIT only that it is also revealed from the record that these excel sheet were neither prepared by the assessee nor was found from the control and possession of the assessee. This said Excel Sheet was said to be maintained by a 3rd person and was also found from the possession of a 3rd person. In view of this, no adverse inference can be drawn against the assessee on the basis of said Excel Sheet. It is further submitted that there is discrepancy / disconnect in the figure appearing in the tables at Page 36
and 37 of the order of the ld. AO as pointed by the ld. AR of the assessee.
The record also shows that the entire exercise of ld. AO is based on mere presumptions and assumption without making any efforts to analyze that record and place on record the corroborative evidence to support the view taken by the ld. AO. Thus, when the loose sheet is relied upon without any specific evidence evidence suggesting the contention raised the addition does not survive. The evidence which was relied upon by the revenue are electronic records and the same are relied upon without complying with the requirements of Information Technology Act, 2000 read with Sections 65A and 65B of the Indian Evidence Act, 1872. As is evident from the record that documents, as relied upon by the Id. AO, are the extracts of the excel sheet alleged to have been maintained by Gokul Kripa Group and seized during the course of search on 19.01.2021. Record further reveals that Anshu Sahai (HUF) vs. ACIT there is no satisfaction of the ld. AO that all the requisite steps were taken by him to ensure that the data output of the PEN Drives/Computer records, seized during the search on Gokul Kripa Group were analysed on "as is"
basis and there is no risk of it being tempered by anyone. The request of the assessee to cross examine the person who made statement were asked but were also not provided therefore, this action also violates the principles of natural justice as held by the Apex Court in the case of Andaman Timbers Industries (Supra) wherein the court held that ““…not allowing the assessee to cross-examine the witnesses by the Adjudicating
Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected”.

When the assessee taken up all these issues before the ld. CIT(A) who did not deal with the factual inconsistencies brought to his notice as above. He simply rejected the submissions mentioning that what details and in what manner are kept by the buyer is dependent on the trust he has on the seller. On this of corroborative evidence the ld. CIT(A) rejected that plea. Even the plea of the assessee that the material was in the nature of dumb document which would not possess any stand-alone evidentiary
Anshu Sahai (HUF) vs. ACIT value since it did not contain the complete particulars of the relevant transactions and the persons involved in the said transactions. The addition as made on the basis of such a dumb document would not be sustainable as the same is non-speaking document, without any corroborative material
/ evidence or without a finding that such document had materialized into transactions giving rise to income of the Assessee. Thus, to establish that the impugned receipt is of the assessee is on the revenue and the same cannot be done reverse by the assessee. On this issue we get support from the decision of the Hon’ble Supreme Court in the case of K.P
Varghese Vs. ITO (131 ITR 597) wherein the Apex Court held that the onus of establishing that the conditions of taxability were fulfilled would always be on the revenue and throwing the burden of showing that there was no under-statement of consideration on the assessee would be to cast an almost impossible burden upon him to establish the negative, namely, that he did not receive any consideration beyond what has been declared by him. Thus, the burden would be on revenue to adduce proper evidence to corroborate the contents of the seized material for the purpose of establishing that the assessee was, in fact, in receipt of the payments as noted in the seized material. Discharge of reverse burden is not expected from the assessee. When question raised that whether such entries found
Anshu Sahai (HUF) vs. ACIT in the material seized from a third-party could be used to draw adverse inference against the assessee without there being anything more in record in corroboration of the same, the revenue merely relied upon the finding recorded in the order of the assessment and material whatsoever found at the time of third party search were placed on record. Thus, when the material relied upon were not seized from the premises of the assessee nor the same was found in the handwriting of the assessee the same would not constitute adequate evidence to draw any adverse inference against the assessee in the absence of any corroborative evidence as held by Hon'ble
Delhi High Court in the case of CIT v. Sant Lal (118 Taxmann.com 432).
Even the Hon’ble Bombay High Court in the case of CIT v. Lavanya Land
(P) Ltd (2017)(397 ITR 246) (Bom), taken a view that that where entire decision is based on huge amounts revealed from seized documents but not supported by any evidence of actual cash passing hands, no addition can be made. As serviced the decision of the Apex Court in the case of Common Cause v. UOI (2017) 77 Taxmann.com 254 (SC) that ;
“We are constrained to observe that the Court has to be on guard while ordering investigation against any important constitutional functionary, officers or any person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence and not admissible in evidence, we have apprehension whether it would be safe to even initiate investigation. In case we do so, the investigation can be ordered as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any unscrupulous
Anshu Sahai (HUF) vs. ACIT person or business house that too not kept in regular books of account but on random papers at any given point of time. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and that too, supported by some other circumstances pointing out that the particular third person against whom the allegations have been levelled was in fact involved in the matter or he has done some act during that period, which may have co- relations with the random entries. In case we do not insist for all these, the process of law can be abused against all and sundry very easily to achieve ulterior goals and then no democracy can survive in case investigations are lightly set in motion against important constitutional functionaries on the basis of fictitious entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily.”
Hon’ble Karnataka High Court as serviced by the ld. AR of the assessee in the case of DCIT v. Sunil Kumar Sharma, [2024] 469 ITR 197 (Karnataka), wherein the Hon’ble High Court examined the following question at para 21
of the Order:

(1) Whether ‘Loose Sheets’ and ‘Diary’ have an evidentiary value?

The Hon’ble High Court answered in favour of the assessee as under at para 26
of the Order:
“26. It is established in law by the Hon'ble Apex Court that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex
Court, we are of the view that the action taken by the respondent/Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal.”
Aggrieved by the said order, the Department preferred a Special Leave Petition
(SLP) before the Hon’ble Supreme Court. However, the Hon’ble Supreme Court was pleased to dismiss the said SLP in [2024] 165 taxmann.com 846 (SC)
Resultantly the appeal filed by the assessee in ITA no. 466/JP/2025
stands allowed.
13. The bench noted that the facts of the case in ITA Nos. 467 &
468/JP/2025 are similar to the facts of the case in ITA No. 466/JP/2025 and we have heard both the parties and perused the materials available on record. The bench has noticed that the issues raised by the assessee in these appeals in ITA Nos. 467 & 468/JP/2025 are equally similar on set of facts and grounds so far as it relates to ground no. 1 to 4 raised in these appeals too. Therefore, it is not imperative to repeat the facts, various grounds and arguments raised by both the parties in these appeals so far
Anshu Sahai (HUF) vs. ACIT as it relates to the ground no. 1 to 4. Hence, the bench feels that the decision taken by us in ITA No. 466/JP/2025 shall apply mutatis mutandis in the case of Anshu Sahai (HUF), Jaipur in ITA Nos. 467 & 468/JP/2025
so far as it relates to ground no. 1 to 4 are concerned.

On this issue while dealing with ground no. 5 we have already considered that no addition can be made in the proceeding u/s. 153C of the Act qua incriminating material considering the decision of Apex Court in the case of M/s U. K. Paints (Supra). Even otherwise when the assessing officer in the earlier 143(3) proceeding has already verified that claim of the assessee to verify that claim again 148 cannot be invoked as it is a change of opinion by the assessing officer.
In terms of these observations, the appeal of the assessee in ITA
Nos. 467 & 468/JP/2025 are allowed.
Order pronounced in the open court on 03/11/2025. ¼ Mk0 ,l- lhrky{eh ½
¼ jkBksM deys'k t;UrHkkbZ ½
(Dr. S. Seethalakshmi)
(Rathod Kamlesh Jayantbhai)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur fnukad@Dated:- 03/11/2025
*Ganesh Kumar, Sr. PS
आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
1. The Appellant- Anshu Sahai (HUF), Jaipur
2. izR;FkhZ@ The Respondent- ACIT, Central Circle-02, Jaipur
3. vk;dj vk;qDr@ The ld CIT
4. vk;dj vk;qDr¼vihy½@The ld CIT(A)
5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत
6. xkMZ QkbZy@ Guard File (ITA Nos. 466 to 468/JP/2025) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत